Essential Services

Depending on where you live, you may be experiencing the end of a government mandated stay-at-home order due to the COVID-19 pandemic. This order has minimized commuting and constrained work activities to whatever can be accomplished in-residence. Only essential services continue. In consequence, there’s been a dramatic drop in our energy consumption.

Let’s look at this via oil. By the numbers, the world oil production has been hovering at just less than 100 million barrels per day. This value has been somewhat consistent for the past two years as demand and supply were well matched. Due to the order, the estimated consumption drop for the month of April 2020 is 29 mb/d. That is, we are using 1.77e17 Joules less energy from oil each day because of COVID-19 and the stay-at-home order.

This number is spectacular, especially from a conservationist point of view. Even more spectacular however is the amount of energy still being used. That is, even though the global economy is nearly shut-down we are still using 4.34e17 Joules of energy from oil. Each and every day! And this is solely for oil.

Oil supplies about 34% of the total primary energy consumption across our world. Assuming all primary energy consumption experiences the same drop means that humans need 12.77e17 Joules per day of energy (208 mb/d). This equates to about 700 dams the size of the Three Gorges Dam. This is just to sustain ourselves. One could say that this is the basal daily amount for our civilization.

Can we sustain this? Is it possible to create this amount of primary energy without affecting our planet? What will we do when the fossil fuels are no longer available?

Resource Extraction

Today we have a very clear view of our civilization’s dependence upon energy. Or, really, the effect when we break that dependence. The break is caused by COVID-19. The effect is the near total stoppage of the economy as governments have ordered stay-at-home isolation. Thus, with no one going to work, or working, or returning from work then we consume a lot less energy.

Oil remains the dominant source of our civilization’s energy. Not long ago a barrel of oil was trading for well above $100US per barrel. Today, in the futures market, the cost of a barrel of oil has gone negative! That’s right, effectively producers have to pay someone to take the oil of their hands.

What really happened? Simply put, the oil producers did not want to contract their operations even though COVID-19 reduced demand. Thus for weeks they have been pumping an excess of up to tens of million of barrels of oil each day. Obviously if it’s not being consumed then it must be stored. And storage costs money. And the available storage space shrank very fast. Thus the drop in price.

Which of course brings up a sticky point. As the producers stop producing they will stop their oil rigs. And walk away. For example, Canada last week provided $1.7B to clean up orphaned wells. Orphaned means that the producer has walked away and the government must clean up their mess. Their sticky mess.

Expect COVID-19 to be temporary and this situation to be temporary. But it does highlight our civilization’s approach to resource extraction. That is, we are keen on getting the value from the resource but less keen on spending money to clean up the mess. Is this a sustainable plan with which to go forward? Which dependencies should our civilization maintain?

Photo by Donald Giannatti on Unsplash